Total Inventory Cost = TIC Total Order Cost = TOC Total Carry Cost = TCC Fixed Order Cost = FOC Annual Demand (Units) =U Whole Sale Purchase Price ( or Unit Cost )=PP Annual Carry Cost (% of PP )= CC TOC=FOCU/Q TCC=(Q/2)CCPP Order Quantity = TIC=TOC+TCC=(FOC(U/Q)+((U/2)CCPP) Cost Minimizing Q =SQRT((FOCU)/(CCPP))= note: this is derived by setting the first derivitive of TIC to 0 . Reorder Point =(U/365) It = ROP Input Data \begin{tabular}{|c|c|} \hline Annual Unit =U & 240 \\ \hline Purchase Price = PP & $3,000.00 \\ \hline Fixed Order Cost = FOC & $1,000.00 \\ \hline Carry Cost =cc & 25% \\ \hline Prder Lead Time (in days) = LT & 6.00 \\ \hline \end{tabular} Objective: Find the order quantity that minimizes the total cost of managing inventory